Wonga cap loan rate all by themselves

Wonga have capped the costs of their payday loans at the maximum rate of interest allowed by the FCA. You may remember that, last month, the regulator said that they were introducing a cap of 0.8% and rules would come into play on the 2nd January.

Well, Wonga have decided to implement these new rules now, as well as capping late payment charges at £15, which is also the maximum allowed.

The payday loan vendor has also ditched the £5.50 transmission fee and increased the minimum you can borrow to £50 (it was previously £1, remarkably. Why you'd want to take a loan out for a quid is anyone's guess).

Wonga UK chief executive Tara Kneafsey said: "We’re pleased to offer our customers a cap-compliant product ahead of the FCA’s January deadline. This and all the changes we’re making at Wonga reflect our commitment to provide short-term lending to the right customers in a responsible and transparent way."

You can almost hear the seething resentment in her words can't you? 'They made us do it.'

Of course, Wonga will still be grumpy because, in October, they had to write off 330,000 customer loans after the FCA found that they weren't properly checking their customers' ability to repay loans. Oh, and they also had to dole out over £2m after they were caught sending out letters to threaten customers with, from non-existent law firms.

Here's hoping they have a rotten Christmas.

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2 comments

Alexis

They could of course only choose to lend to people with decent credit scores if they wanted to be paid back, couldn't they?

How Wonga decide if you are credit worthy is actually very interesting, and they rely on more factors than the credit score.
For example, if their website detects your screen size is tiny it means your clearly a pauper and can't afford a nice computer and so you wont get your money. Similarly, Apple Mac owners are more likely to get accepted than Windows XP users. Try going on to their website with different computers and see how much money they offer you in the example on the home page.
Borrowers who slide the slider all the way to the right are probably desperate and so more likely to default.
They also check your Facebook and any other social media data that they can get on you to decide. Although it seems the FCA don't agree its a workable process.